European shares advance despite data showing contraction of euro area economy

European shares advanced on Tuesday despite new Eurostat data showing the euro area economy contracted by 0.1 per cent between July and September, raising the prospect of a recession by Christmas.

Wall Street’s main indices, meanwhile, struggled for direction in advance of the Federal Reserve’s next decision on interest rates.

DUBLIN

The Iseq Overall Index was slightly improved on the day, adding just over 0.1 per cent, while underperforming its European peers on an otherwise positive day for equities across the Continent.

Will inheritance cause a problem with my weekly disability payment?

---

Why are so many people leaving the UK’s workforce?

---

‘Since Covid, I am even more conscious of not buying processed food’

---

Trump Media’s convenient complaint about short sellers

---

Ires REIT added 1.3 per cent to close the session out at 91 cent per share after a trading update on Tuesday that traders in Dublin said was well received. The largest private residential landlord in the State said it had reduced its loan-to-value ratio to 41.9 per cent from 44.6 per cent in June after raising €96.5 million from the disposal of numerous assets. It also announced chief executive Margaret Sweeney’s plans to retire from the company she has helmed for more than six years.

Cairn Homes also received a bounce from the Ires update, adding 1.8 per cent to €1.11 per share

Irish banks were mixed on the day with AIB essentially flat at €4.09 per share, while Permanent TSB remained unchanged at €1.88. Shares in Bank of Ireland, meanwhile, fell by more than 1.5 per cent to €8.45 on relatively high volumes, although traders said there was no stock-specific news.

Weighing down the index Ryanair fell 1.5 per cent to €14.18 per share in line with its peers, including Air France and EasyJet, which also gave up ground.

Smurfit Kappa rallied 1.4 per cent to €30.74 in advance of its third-quarter trading update on Wednesday, which analysts expect to be in line with previous estimates. Investors are also hoping to hear more about the packaging group’s merger with US Westrock.

EUROPE

European shares mostly shrugged off renewed recession fears as cooling bond prices lifted moods and better-than-expected corporate earnings boosted sentiment. The pan-Europe Stoxx 600 advanced 0.6 per cent, while the blue-chip Stoxx 50 moved 0.9 per cent higher.

Stellantis gained as it reported better-than-expected third-quarter revenue, bolstered by stable pricing, improving logistics and robust demand for models such as the electric Jeep Avenger.

Budweiser–maker Anheuser-Busch InBev rose after reiterating its annual profit forecast and reporting quarterly adjusted earnings that met analysts’ expectations.

Tuesday’s rally closed out the worst October for European equities since 2020.

LONDON

The main UK indices were mixed but underperformed their European peers in volatile trading. Dragged down by BP, which plummeted almost 4.6 per cent, the benchmark FTSE 100 was flat on the session, while the mid-cap FTSE 250 advanced almost 0.4 per cent.

BP’s interim chief executive on Tuesday downplayed speculation that the oil company could be a takeover target after reporting weaker than expected profits of £2.7 billion (€3.1bn) for the third quarter of this year due to weaker energy prices.

The lower than expected profits, which tumbled from £6.8 billion in the same months last year, mark BP’s first set of financial results since the board appointed BP’s chief financial officer Murray Auchincloss to the top job on an interim basis.

Shares in its main rival Shell also fell 1.5 per cent, while industrial miners Glencore and Antofagasta declined 3.5 per cent and 1.8 per cent respectively.

The aerospace and defence index gained 0.9 per cent, led by a 4.1 per cent rise in Rolls-Royce to the top of FTSE 100 after Barclays raised its outlook for the stock.

NEW YORK

Wall Street’s main indices struggled for direction as investors awaited the outcome of the Federal Reserve’s monetary policy meeting while assessing the latest batch of earnings reports.

Megacap growth stocks, which had powered over 1 per cent gains on Wall Street on Monday, were a drag on Tuesday. Meta Platforms, Microsoft and Alphabet fell between 0.4 per cent and 1 per cent.

Nvidia dropped 2.6 per cent after a report said latest US curbs could force the chip designer to cancel billions of dollars of orders to China.

Seven of the 11 major S&P 500 sectors were in the green, with real estate up 1.2 per cent and leading gains, while communication services was down 0.4 per cent. – Additional reporting: Bloomberg, Reuters